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Huawei's Honor sub-brand makes foray into Africa

Huawei's Honor sub-brand makes foray into Africa

Global smartphone manufacturer Huawei has launched its four-year old e-commerce and youth-market focused independent smartphone brand called Honor into the South African market - ahead of a wider launch across the continent over the coming months.

Chris Sun, Vice President for Honor in Middle East and Africa, who is based at Honor regional headquarters in Dubai, says newly appointed staff at recently acquired office space in Johannesburg will lead sales of the Honor 9 Lite and Honor 7X devices, available to consumers starting this week.

"We will launch into Africa in different phases, but South Africa is the first market for Honor in the continent and this is based on user demand. Obviously South Africa is the biggest market in terms of population and value, South Africa also has the highest young population which means it fits with Honor's objectives. Our focus on online platforms for this brand is in order to use them for sales as well as for communication. Although the continent is not used to online purchases, in terms of mobile internet penetration it is very high which makes online platforms the right place to engage our customers."

Honor has partnered with Takealot for the sale of the two devices online at recommended retail prices of R3500 for the Honor 9 Lite and R4999 for the Honor 7x, although Sun says there are plans to partner with other e-commerce sites - especially once the rollout into the rest of the continent gets underway.

The stock will be supplied to Takealot by Mustek, while 3G mobile will distribute it via the Foschini Group store network.

Sun believes Africa will play an important role in changing Honor's revenue split which currently stands at 85% of sales made within China and the rest in markets across the world to a 50% share between the two by 2020.

Africa responds

"We haven't set specific sales targets for Africa at the moment but we believe there is space for this brand here. We've done well in China, Europe America, Middle East, India and Russia where competition is very high. The users will make their own judgment as to which phone in the market is more durable, of better quality and gives a better experience. The Honor 9 Lite, for instance, with its four cameras and a full screen I think speaks for itself already. We don't see the other brands as competition for as long as we strive to make better phones that users like. We are our own competition."

Honor devices are targeted at the middle and lower range markets. Huawei introduced several high end devices into the African market last year and is set to unveil new P20 series devices for this market in the first week of April.

Zhao Likun, General Manager at Huawei Consumer Business Group for Sub-Saharan Africa agrees with Sun that the African market will respond well to Honor. "In South Africa the growth of the smartphone market is very high. I think Honor can tap into the growth opportunity. Honor has a different personality compared to Huawei because it pays more attention to the younger consumer."

Likun says the Consumer Business Group grew its market share in the region for premium devices from 9.3% in the second quarter of 2016 to 10% in the last quarter of 2017. Total market share in South Africa alone for the fourth quarter of 2017 stood at 16.3%, while the market share for premium devices (those priced at over US$600) is recorded at 13.8%.

Huawei will also construct a new South Africa warehouse in 2018 to reduce the delivery time of its devices from 21 to 3 days, according to Likun. Y series devices will also be launched in Africa in the second quarter of 2018.

According to Likun Huawei plans to launch a new commercial 5G smartphone globally in 2019.

"5G is another key power for digital transformation in all industries as it will connect not only people to people, but also people to machine and machine to machine. Huawei started 5G research in 2009 and has dedicated 600 million dollars to it up to now." adds Likun.

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